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Reuters

It is now a full eight months since Indonesia turned off the supply of nickel ore to China's giant nickel pig iron sector.
The unexpected fulfilment in January of a long-standing promise to ban exports of unprocessed minerals such as nickel ore sent the London nickel market on a rally, which peaked in May at US$21,625 per tonne.
Much of those gains have since been given back as the market kicks its heels waiting for some tangible sign of supply stress in China.
China, however, is not playing its expected role in the nickel story, the country's latest trade figures representing another dousing of cold water for the many nickel bulls. Imports came to just 39,000 tonnes in August, in line with the previous three months.
Moreover, the latest figures from the International Nickel Study Group show Indonesian mined nickel output collapsing to 138,000 tonnes in the January-July period from 421,000 tonnes a year earlier.
Indonesian production and Chinese import figures confirm the seismic changes under way in Indonesia, which is using the ban to force its mining sector down the value-added route of processing.
However, what is surprising is the volume of material now flowing to China from the Philippines.
The latter has historically been the second-most important source of ore for China's nickel pig iron producers, but less favoured than Indonesia because its ore is lower-grade. It was widely expected that Chinese imports from the Philippines would rise after the Indonesian ban.
But not to the extent we are now seeing.
Imports of ore from the Philippines topped five million tonnes in August for a second month. Indeed, August's tally of 5.33 million tonnes marked a record high with cumulative imports in 2014 now up 26 per cent at 22.61 million tonnes.
The figures now match peak volumes from Indonesia before the implementation of the ban at the start of this year, causing analysts to do a collective double-take on a country collectively viewed as a second-tier supplier.
The Philippines looks capable of supplying far more replacement ore for China than anyone expected.
Even more worrying for bulls is what is happening with China's trade in refined nickel.
Import volumes might reasonably have been expected to trend higher right now as the Indonesian ban translated into supply stress in China.
Far from it, however. Imports of refined nickel have fallen 11 per cent in the first eight months of this year.
It is not what the market expected eight months after the Indonesian export ban. China is giving every appearance of being awash with nickel at a time when everyone else thought it would be starting to experience a supply deficit.
One or the other trend is going to have to change to get the narrative back on track.
It could be a long wait, though, and a lot longer than the nickel bulls were expecting.
Reuters


China throws cold water on nickel bulls

Indonesia is pushing its miners down the route of processing.

Business

Commodities

Surge in imports of the mineral fails to materialise despite Indonesia supply ban


It is now a full eight months since Indonesia turned off the supply of nickel ore to China's giant nickel pig iron sector.


China throws cold water on nickel bulls

.css-1c6uqr6{color:inherit;font-weight:inherit;font-size:inherit;font-family:inherit;line-height:inherit;overflow-wrap:break-word;}Surge in imports of the mineral fails to materialise despite Indonesia supply ban

Surge in imports of the mineral fails to materialise despite Indonesia supply ban